1. Consider the following table. Suppose that FC = $10. What is the level of output set by a competitive firm when P = $18? Q 0 1 2 3 4 5 TC 10 51 78 97 114 135 ( ) A. The firm shuts down. ( ) B. 1 unit
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- The following graph shows the marginal cost curve for Oiram-46, a competitive firm producing magic hats. Suppose that currently, the prevailing market price is $1.50 per magic hat. On the following graph, use the blue points (circle symbol) to plot Oiram-46's price line. Then use the grey points (star symbol) to indicate the profit maximizing quantity of output produced by Oiram-46. TOTAL COST (Dollars) he 12 11 10 a 8 N 3 2 1 0 + Oiram-46 7 0 MC + H 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 QUANTITY (Magic hats per week) Based on the graph, Oiram-46's profit-maximizing quantity is Demand Profit maximizing quantity ? magic hats, average revenue is $ and marginal revenue is2. The Competitive Equilibrium. Consider a competitive firm with the cost function TC = 1600 +4Q². a. Suppose that P = 200. What is the optimal level of output for the firm? What are profits or losses for this firm? Optimal Output: Profits or LossesMC ATC 24 P = MR 20 18 4 100 350 500 700 q Bales of hay from the graph of a perfectly competitive firm above, answer the following questions:# 1. What is the profit maximization level of of output? ( 2. What is the value of ATC at the best level of output? 3. what is the amount of profit the firm makes at that level of output? show your calculations. 4. At what price firm will breakeven В I
- The data are for a firm operating in perfect competition. Output 1 Marginal Costs Average Variable Costs 70 65 60 60 62 64.3 70 76.25 2 3 4 5 6 7 8 70 60 50 60 70 80 100 120 Average Costs 200 130 103.3 92.5 88 86 88.6 92.5 Use the table above to answer this question. If the market price is $80, what is the profit-maximizing output and will be the firm profit or loss?change the questions or use different values? Question 1. In competitive markets, there are many small firms with each firm unable to influence the market price. Suppose company ABX operates in the wheat market. The company produces and markets wheats at a Price = $20 per container. The firm’s total costs are given as: TC = 50 +2Q + 3Q2 What is the firm’s demand curve? Show it on a graph and label the axes showing P and QThe graph shows the demand curve (D), average total cost curve (ATC), average variable cost curve (AVC), and the 90 - marginal cost curve (MC) for a perfectly (or purely) 80 - competitive firm. D= MR 70- Assuming that this firm maximizes profit, what is this firm's profit? 60 - ATC 50 AVC profit: $ 40 40- 30- MC 20 - 10- 40 10 20 30 50 60 70 80 90 Quantity Price and cost ($)
- 5. The market demand for leather handbags is given by the function P = 75 - 1.5Q. P is priceper handbag, and Q is output per time period.The market supply is given as P = 25 + 0.50Q. A typical competitive firm that markets thistype of bag has a marginal cost of production of MC = 2.5 + 10q. [4]a) Calculate the market equilibrium price for the bags as well as the output rate in themarket.b) Calculate how much the typical firm will produce per time period at the equilibriumprice.c) If all firms had the same cost structure, how many firms would compete at theequilibrium price computed in (a) above?Will a perfectly competitive market display productive efficiency? Why or why not?ATC MC PA e AVC P3 P2 P1 8 10 11 12 Quantity (per day) The figure above shows a firm in a perfectly competitive market. If the industry price is between P2 and P3: Firm makes loss but produces because total revenue is greater than total variable cost. Firm makes loss but produces because total revenue is greater than total fixed cost. Firm makes profits because total revenue is greater than total cost. Firm shuts down production because loss from producing is greater than total fixed cost. Price and costs (dollars)
- Rambutan is a fruit prized in Eastern Asia for its unique hairy look. Once peeled, it reveals a sweet, slightly sour, grape-like, gummy-tasting fruit. The graph shows the average total cost, marginal revenue, and marginal cost curves of a perfectly or (purely) competitive rambutan farmer. This firm is incurring a firms will this market. In the long run, What is this firm's profit or loss, rounded to the nearest penny? If the market price fell to $9.51, the firm would Price per bushel $12.11 10.11 9.51 MR C 5.4 A MC B ATC 7 Quantity (bushels)4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 +÷q? Marginal cost: MC = q; where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Demand: QD = 120 – P , where P is the price and Q is the total quantity of the good in the market. Currently, there are 9 firms in the market. In each following question, please explain how you find the answer! 4.1 What is the equilibrium price and quantity for this market in the short run? 4.2 In this equilibrium, how much does cach firm produce? Calculate cach firm's profit or loss. Is there incentive for firms to enter or exit? 4.3 In the long run with free entry and exit, what is the equilibrium price and quantity in this market? 4.4 In this long-run equilibrium, how much does each firm produce? How many firms are in the market?(a) What is meant by zero economic profit?(b) What are the conditions that need to be satisfied for a long-run competitive equilibrium?